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Wright Solutions, Inc v. Rocky Wright

April 18, 2013

WRIGHT SOLUTIONS, INC., PLAINTIFF,
v.
ROCKY WRIGHT, DEFENDANT.



The opinion of the court was delivered by: Charles B. Day United States Magistrate Judge

MEMORANDUM OPINION

Before this Court is Plaintiff Wright Solutions, Inc.'s Motion For Summary Judgment (ECF No. 43) ("Plaintiff's Motion") and Defendant Rocky Wright's Motion for Partial Summary Judgment (ECF No. 54) ("Defendant's Motion"). The Court has reviewed Plaintiff's Motion, Defendant's Motion, related memoranda, and applicable law. No hearing is deemed necessary. See Local Rule 105.6 (D. Md.). For the reasons presented below, the Court DENIES Plaintiff's Motion and GRANTS IN PART and DENIES IN PART Defendant's Motion.

FACTUAL AND PROCEDURAL BACKGROUND

In its Complaint, Plaintiff alleges that Defendant is liable for breach of contract, detrimental reliance, and fraud resulting from a series of three agreements made in 2011. Am. Compl. ¶¶ 27-75 (ECF No. 15). These three agreements were reached during and subsequent to an earlier case involving the parties, Wright et al., v. The Payer Player LLC, et al., No. 10-cv-01161 (D. Md.). The earlier case was resolved with an Order of Judgment in favor of plaintiffs Calvert Wright and Wright Solutions in the amount of $1,013,943.25 plus attorneys' fees. Id. (ECF No. 42). The defendants in that case were three technology companies who had received loans from Plaintiff. Defendant Rocky Wright was involved in the technology companies either as an owner, partner, or employee, although the parties dispute the extent of his involvement and whether he was personally liable for the judgment. Pl.'s Br. 4-5; Def.'s Br. 1-5. Plaintiff and Defendant share no family relationship despite their common surname. Def.'s Aff. Ex. 2 (ECF No. 34).

The following facts are undisputed: While the earlier case was still ongoing, Plaintiff and Defendant negotiated a business relationship to help Plaintiff recoup its losses from the unpaid loans. Pl.'s Br. 6; Def.'s Br. 5-6. The parties entered into a two-part written agreement on January 24, 2011 ("the Agreement"), and on January 28, 2011 ("the Licensing Agreement").

Pl.'s Br. 6; Def.'s Br. 6. The parties later signed two addendums on May 19, 2011 ("First Addendum"), and on October 13, 2011 ("Second Addendum"). Pl.'s Br. 7-8; Def.'s Br. 8-12. Meanwhile, the earlier case was reduced to judgment on April 27, 2011. Pl.'s Br. 5; Def.'s Br. 5. In the Agreement, Defendant agreed to develop code for a technology which Plaintiff would market and sell; in exchange, Plaintiff would forgive the debt owed by the three technology companies from the earlier case. Pl.'s Br. 6; Def.'s Br. 5-8. In the First Addendum, the parties agreed that instead of providing the originally agreed-upon code, Defendant would provide "Qubeey" technology, a browser-free internet viewing platform which he had been developing. Pl.'s Br. 7; Def.'s Br. 8-9. The Qubeey technology operates through the use of "Qubeey channels," which are tools akin to a website used to communicate with people who "follow" the channels. Pl.'s Br. 6; Def.'s Br. 8. In the Second Addendum, Defendant agreed to build an "integrated analytic engine" feature into the Qubeey technology, which would provide statistics regarding access and use of the channels. Pl.'s Br. 8-9; Def.'s Br. 11-12.

The parties' primary dispute is whether Defendant breached the Agreement and subsequent Addendums by failing to provide functional Qubeey technology and an integrated analytic engine. Pl.'s Br. 10-13. Defendant argues that he fully met his obligations and that Plaintiff filed suit instead of allowing Defendant to demonstrate that the product was functional and complete. Def.'s Br. 13-17. Further, the parties dispute whether Defendant fraudulently informed Plaintiff that his prior technology companies were insolvent to prevent it from pursuing its judgment. Pl.'s Br. 17-19; Def.'s Br. 20-22. Finally, the parties dispute whether Plaintiff justifiably and reasonably relied to its detriment on Defendant's promises to provide Qubeey technology. Pl.'s Br. 13-16; Def.'s Br. 26-35.

ANALYSIS

Rule 56 of the Federal Rules of Civil Procedure provides that a "court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The moving party is entitled to summary judgment when the nonmoving party "fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The Court views "facts and reasonable inferences in the light most favorable to the non-moving party." Dulaney v. Packaging Corp. of America, 673 F.3d 323, 330 (4th Cir. 2012); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). "A genuine question of material fact exists where, after reviewing the record as a whole, a court finds that a reasonable jury could return a verdict for the nonmoving party." Dulaney, 673 F.3d at 330 (citing Newport News Holdings Corp. v. Virtual City Vision, 650 F.3d 423, 434 (4th Cir. 2011); Evans v. Techs. Applications & Serv. Co., 80 F.3d 954, 959 (4th Cir. 1996)).

The parties cross-move for summary judgment on each count of Plaintiff's amended complaint: breach of contract, fraud, and detrimental reliance. Further, Defendant alleges that Plaintiff's Motion must be denied in its entirety because Plaintiff failed to support the motion with admissible evidence. Def.'s Br. 36-39.

I.The Court may not consider unsworn, unauthenticated exhibits, but Plaintiff's Motion need not be denied in its entirety because of its reliance on such exhibits. Defendant argues that because the majority of the exhibits attached to Plaintiff's Motion are inadmissible and not authenticated, it must be denied. Def.'s Br. 37. As an initial matter, a court is not required to deny a motion for summary judgment merely because of the lack of supporting affidavits or other similar materials. Federal Rule of Civil Procedure 56(e) states that if a party fails to properly support an assertion of fact, the court may: (1) give an opportunity to properly support or address the fact; (2) consider the fact undisputed for purposes of the motion; (3) grant summary judgment if the motion and supporting materials-including the facts considered undisputed-show that the movant is entitled to it; or (4) issue any other appropriate order.

In the Fourth Circuit, a court may not consider unauthenticated, unsworn documents on a motion for summary judgment. Orsi v. Kirkwood, 999 F.2d 86, 92 (4th Cir. 1993); see generally Sook Yoon v. Sebelius, No. 08-3173, 2010 WL 4293513 (D. Md. Nov. 1, 2010); Tillery v. Borden, No. 07-1092, 2010 WL 2132226 (D. Md. May 25, 2010). Rule 56 is not unduly rigid- evidence appropriate for summary judgment need not be in a form that would be admissible at trial. Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). However, the party relying on the exhibit must "introduce evidence sufficient to support a finding that the document is what the proponent claims." Stanley Martin Cos. v. Universal Forest Prods. Shoffner, 396 F. Supp. 2d 606, 613 (D. Md. 2005). Although a party not bearing the burden of proof may be entitled to summary judgment without introducing affidavits or other similar supporting materials, a party bearing that burden cannot meet it without sufficiently authenticated evidence. See Carr v. Deeds, 453 F.3d 593, 608 (4th Cir. 2006) (citing Celotex, 477 U.S. at 323-25).

Here, Plaintiff is the party that would bear the burden of proof at trial. Plaintiff's Motion contains a host of attached exhibits (such as emails and letters) which are not incorporated into a sworn affidavit or deposition, and are therefore not sufficiently authenticated. The Court cannot consider these exhibits in evaluating Plaintiff's Motion. In the past, this Court has allowed litigants the chance to resubmit motions for summary judgment when based on similarly unsworn evidence. See Sook Yoon, 2010 WL 4293513, at *5, Tillery, No. 2010 WL 2132226, at *6. It does not take that step here because even if Plaintiff sufficiently authenticated all of its exhibits, Defendant's authenticated evidence raises a genuine and material dispute of fact. As permitted by Rule 56(e), the Court will proceed while considering only the sufficiently authenticated evidence.

II.A genuine question of material fact exists as to whether Defendant breached the Agreement and Addendums by failing to provide functional Qubeey technology. Plaintiff argues that there is no genuine dispute of fact as to whether Defendant breached the contract by failing to provide functional Qubeey technology, while Defendant argues that Plaintiff will be unable to prove such a breach. Pl.'s Br. 12; Def.'s Br. 16. "A breach of contract is a failure without legal excuse to perform any promise which forms the whole or part of a contract." Duncan Services, Inc. v. ExxonMobil Oil Corp., 722 F. Supp. 2d 640, 647 (D. Md. 2010) (quoting Weiss v. Sheet Metal Fabricators, Inc., 110 A.2d 671, 675 (Md. 1955)). While any breach of a contract may give rise to a cause of action for damages, only a material breach excuses the non-breaching party's duty to perform. Jay Dee/Mole Joint Venture v. Mayor of Baltimore, 725 F. Supp. 2d 513, 526 (D. Md. 2010); Barufaldi v. Ocean City Chamber of Commerce, 7 A.3d 643, 656 (Md. Ct. Spec. App. 2010). A breach is material where it renders any subsequent performance "different in substance from that ...


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